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Chicago Federal Reserve President Austan Goolsbee delivered a blunt assessment on June 25: core inflation is “well too high” and “trending the wrong way.”
The latest data backs him up. Core CPI for May 2026 came in at 2.9% year-over-year, stubbornly above the Fed’s 2% target.
The Fed holds steady, and that’s the problem
The Federal Open Market Committee held the federal funds rate at 3.50%-3.75% at its June 17 meeting.
Goolsbee had already flagged this trajectory days earlier. On June 22, he highlighted the persistent pressure inflation continues to exert, even as the labor market remains stable.
Goolsbee has pointed to external factors driving prices higher, including tariffs and energy market shocks.
It’s worth noting that Goolsbee has previously dissented on rate cut discussions, advocating for more caution. His current posture is consistent with that track record.
What 2.9% core CPI actually means
At 2.9%, core prices are rising nearly 50% faster than the Fed’s comfort zone. That gap has persisted long enough to shift from “transitory” to “structural concern” in the minds of multiple FOMC members.
Why crypto investors should care
Goolsbee didn’t mention Bitcoin, Ethereum, or any digital assets in his remarks. But the connection between Fed policy and crypto prices is well-established at this point.
The current federal funds rate of 3.50%-3.75% represents a significantly tighter monetary environment than the near-zero rates that fueled the 2020-2021 crypto bull run.
There’s a second-order effect worth watching too. Persistent inflation erodes purchasing power, which is theoretically bullish for hard assets like Bitcoin. But in practice, the market tends to price Bitcoin more like a tech stock than a store of value during tightening cycles. The correlation with Nasdaq has been far stickier than the correlation with gold over the past several years.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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